LONDON – The Israeli government is offering semiconductor giant Intel up to 1 billion shekels (about $290 million) to expand its manufacturing operations in the country, according to local reports.
Intel already has Fab 28 at Kiryat Gat in the south of the country and the latest announcement from the ministries of industry, trade and labor and of finance appears to be on top of a grant of $200 million towards the estimated cost of $2.7 billion of putting down a second fab module at the Kiryat Gat site. Intel was granted about $200 million in January 2011 but still wanted more (see Report: Israel offers Intel fab grant).
Israel has found some more money, but it is attaching employment strings and linking the funding to two locations, Kiryat Gat in the south and an chip assembly unit to be located in north of the country. The original Kiryat Gat expansion is expected to take the wafer fab's chip making capability down to 22-nm manufacturing process capability and the latest application for cash is expected to take it down to 14-nm.
As a condition of the grant, Intel will have to employ 1,500 additional workers in Kiryat Gat, and between 600 and 1,000 workers in the north, according to a Globes report. At the same time Intel will be given tax breaks under a new law intended to encourage capital investment, the report said.
The two ministries have come up with a three-stage system for Intel; 300 million shekels (about $90 million) for investment in Kiryat Gat alone; an additional 550 million shekels (about $160 million) for setting up an assembly plant in the north and employing 600 people; and a further 150 million shekels (about $45 million) for expanding the number of jobs in the north to 1,000. This is according to a Ha'aretz report.
The payments would begin in 2014 but the jobs have to last at least ten years, the reports said.
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